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Dealing With Debt

As the new millennium got under way, Robert Vonderheide was poised to become a star clinical researcher at a top research institution. He had become a Doctor of Philosophy in immunology as a Rhodes scholar at the University of Oxford in the United Kingdom and an M.D. at Harvard Medical School in Boston, and he had completed a 3-year residency and a research fellowship, all in support of his dream of running his own research laboratory. But just as his goal seemed within sight, he was tempted by the siren song of industry, which offered a lucrative career--and a quick end to the burden of tens of thousands of dollars in medical school debt.

"If you want to be the person who is setting the standard of care and changing the paradigm of the way we treat disease, then stay in academic medicine. Don't let debt be a distracter that determines your future career." --Christine Chung

"When you are a junior faculty [member] and you have a family and children and large medical school debts, even if you want to be a physician-scientist, the thought of private practice or industry definitely crosses your mind," says Vonderheide, who is now an associate professor of medicine and an investigator at the Abramson Family Cancer Research Institute at the University of Pennsylvania.

Medical school debt, which has been increasing at a rate of 6% to 7% per year since 2000, now stands at an average of $155,000 among American medical school graduates, according to the Association of American Medical Colleges (AAMC). Debt on this scale is a burden for nearly all graduates, but it is especially onerous for those who choose a career in academic research and whose incomes are generally much lower than physicians in private practice or even clinical-practice peers at university hospitals.

Vonderheide was able to turn away from the temptation of industry, thanks to the educational loan repayment that came with the Damon Runyon Cancer Research FoundationClinical Investigator Award he received in 2000. "Because of the kind of translational work I was doing, I was interacting with a lot of industry folks, and so there were a lot of informal discussions" about job opportunities in industry, Vonderheide says. "But really, those sorts of notions dissolved in my head when I knew that I had an option to pay off my loans."

Effect of debt on career choices

(Courtesy, Robert Vonderheide)

Robert Vonderheide

The goal of the Damon Runyon award--the first clinical scientist grant program to offer loan repayment--is to help retain physician researchers who otherwise might choose a different career path. Of 48 awards made since 2000, one-third of recipients have requested loan-repayment assistance ranging from a few thousand dollars up to $80,000, according to Yung Lie, scientific director of the foundation. "As far as trying to make a living, it's difficult for someone at that age to make the decision to go into research when they could take a high-paying job as a clinician," Lie says.

The impact of student debt on career choice has been a concern of academic leaders since the early 1990s, when a series of commentaries published in medical journals warned of a serious drought in the physician-scientist pipeline unless something was done to help recruit and retain people on that career path. Responding to those calls, Damon Runyon began to offer loan repayment, and in 2000 the National Institutes of Health extended itsLoan Repayment Program (LRP)--which until that time had been available only to intramural NIH investigators--to medical scientists at universities and medical centers.

Navigating the debt maze

Current loan-repayment options are insufficient to meet the needs of all physician-scientists carrying significant debt, but with persistence, the majority of clinicians bound for research careers can expect to see their medical school debt substantially reduced by these programs. Success rates for loan-repayment programs run about one in three, but more than half of applicants are eventually admitted to a program, with those who need it most succeeding the most often.

(NIH)

This chart shows the total number of applicants and the total number of successful applications to the NIH Clinical Research Loan Repayment Program. Source: NIH, LRP Information Center

The NIH-LRP is available to U.S. citizens and permanent residents who have completed a doctoral program (M.D., Ph.D., D.O., D.D.S., D.M.D., or Pharm.D.) and who spend at least 50% of their time conducting clinical or patient-oriented research. The program is competitive, with about one-third of applicants receiving loan repayment in 2008 (see chart). Recipients are chosen based on need (their educational debt must be greater than 20% of their annual salary) and their potential to pursue a long-term career in research.

Loan repayment is offered for a 2-year term, with a cap of $35,000 per year--an amount that some say is not keeping pace with the rate of debt students are now incurring. In 2002, the mean medical student loan debt was $104,000; 6 years later it was up to $155,000, and the terms of NIH loan repayment have not changed since its inception. Recipients are eligible to apply for a 2-year renewal, if needed. Recipients are required to remain engaged in research during the entirety of the 2-year term.

The application procedure is similar to an NIH grant application, with applicants expected to provide a statement of career and research interests, letters of recommendation, and evidence of research support and the ability to complete the proposed research. The application period is from 1 September to 1 December, and all eligibility requirements and application information is available on the extramural Loan Repayment Programs Web site.

Ruth L. Kirschstein National Research Service Award recipients, either individual postdoctoral fellows (F32) or institutional trainees (T32), are eligible for loan repayment during the 2nd year of NRSA support if the recipient files for and receives an extension of the NRSA service payback requirement. Find more information on those requirements at the NRSA Web site.

AAMC's Financial Information, Resources, Services and Tools (FIRST) program has on its home page a useful 15-minute slide show called "The Economics of Becoming a Doctor," which outlines loan and repayment options. Julie Fresne, AAMC director of student/resident debt management services, says FIRST will soon offer an online debt organizer that will keep track of loans and include a repayment calculator.

IBRinfo is a nonprofit arm of the Project on Student Debt that helps medical students navigate two new federal loan programs: Income-Based Repayment and Public Service Loan Forgiveness.

Such programs appear to be working. A recent study of the impact of NIH's extramural loan-repayment program from its inception to 2007 demonstrated that investigators who had participated in the loan-repayment program were more likely to apply for and receive NIH grant support than were nonfunded applicants. Between 2003 and 2007, the extramural loan-repayment program funded slightly more than half of 9820 applicants.

NIH's Medical Scientist Training Program (MSTP) allows students in 43 M.D.-Ph.D. programs to avoid much of the debt they would otherwise incur. Tuition and fees are waived in these programs, and students receive a stipend to assist with living expenses. Many more M.D.-Ph.D. programs funded from other sources, including grants and institutional funds, offer essentially full coverage for medical school tuition and also provide a stipend.

But not all M.D.-Ph.D.s emerge from their studies debt free. Almost two-thirds of 1833 M.D.-Ph.D. graduates between 2000 and 2006 had amassed at least some educational debt, with 11% owing more than $100,000, according to a 2008 study of M.D.-Ph.D. graduates published in TheJournal of the American Medical Association (JAMA). Many students take out loans to cover living expenses, particularly if they are attending medical school in high cost-of-living areas such as New York City, Boston, or San Francisco. In addition, the medical residency years often coincide with starting a family, Lie says, and some students take out loans to cover child-care and other living expenses.

Vonderheide is concerned that, as medical school debt reduces the number of M.D.s in the pool of physician-scientists, MSTP and other M.D.-Ph.D. programs will become the only way physician-scientists are trained. "We should not say that in order to be a physician-scientist you have to have a Ph.D. or go through the MSTP program," he says.

In the 2008 JAMA study, graduates with less than $100,000 in debt were more likely to report planning a research career. "Our research showed loan-repayment programs really might promote greater interest in research careers," says Donna Jeffe, lead investigator of the JAMA study and a health behavior researcher at Washington University in St. Louis, located in Missouri.

Loan-repayment programs

(Courtesy, Christine Chung )

Christine Chung

For Christine Chung, a Korean immigrant who funded her entire higher education with loans, the NIH Loan Repayment Program made the difference between choosing an academic career and opting for a more lucrative career in private medical practice.

"In your last year of fellowship, you get all these e-mails and flyers and calls from headhunters about making $500,000 in private practice in a beautiful city," Chung says. "You get bombarded by all these opportunities of making money. The reason I stayed in research is, when I was a 2nd-year fellow, my division chief forwarded me an e-mail saying the NIH is starting a loan-repayment program." She says she had calculated that it would take her 30 years to repay her $140,000 in loans. With interest, the total would come to more than half a million dollars.

"I am a Korean-American, and in my culture having a debt is just not acceptable," she says. "It was very emotionally and morally bothersome that I had borrowed all this money. ... I wanted to have a better life, and I did what I needed to do, but it was very stressful."

Chung, who was on the physician-scientist pathway at the University of North Carolina, Chapel Hill, and is now an assistant professor of medicine at the Vanderbilt University School of Medicine in Nashville, received loan repayment from NIH and later supplemented that with loan repayment as a Damon Runyon scholar. She finally became debt-free in 2008, more than 20 years after taking out her first student loan.

Rule changes

Compounding the problem of repaying medical school loans, in 2007 Congress changed the rules for repaying the most common federally subsidized student loans. Beginning in July 2009, most medical students will no longer be able to defer loan repayment during their medical residency years. Using a new income-based repayment program, graduates will be expected to start paying off their loans as residents. For those under extreme financial constraints, a "forbearance" during residency is still possible, but loans, which did not formerly accrue interest during deferment, now begin accruing interest immediately upon graduation.

For Vonderheide, the thought that he might have been forced to start repaying his loans during residency is painful. "I lived next door to the Mass. General [hospital] because I couldn't afford a car," he says. "Any more financial obligations could have made a major impact."

Loans have become more complex in recent years, and it can be difficult for students to manage their debt after graduation. "One of the most painful things with my student loans was that one company would sell [my loan] to another and the rules would change, and you could be missing a payment or not know that you owe a payment," says Vered Stearns, assistant professor of oncology at the Sidney Kimmel Comprehensive Cancer Center of the Johns Hopkins School of Medicine in Baltimore, Maryland. "You have so much going on, and you're so busy, and all of a sudden you don't know who you are paying and when. I consolidated my loans at least a couple of times to try to get a lower rate--so you have to be constantly involved."

But for many clinical investigators, incurring debt is just part of the sacrifice to pursue their life's passion.

"If you want to be the person who is setting the standard of care and changing the paradigm of the way we treat disease, then stay in academic medicine," says Chung. The debt is going to be there, she added, but there are programs and resources out there to help. "Don't let debt be a distracter that determines your future career."